At 9/18/12 12:36 PM, TheMason wrote:
* GM paid back it's bail-out but did so with TAXPAYER money from another TARP account GM was given by the US and Canadian government to use for unexpected operating costs...and to pay back their loans to the US government if they could not. It wouldn't be quite so bad if this was a case of robbing Peter to pay Paul...instead it's robbing Paul to pay Paul. ABC News The New York Times

How is this in tune with "robbing"? There were both loans and a flat-out purchase of shares. The loans have been paid back, but the US still has a large amount of GM stock. GM could buy the shares back, but can't afford to at the moment. The government could sell them, but not too many, as it might drive the share prices back down.The bailout basically designed to be a managed bankruptcy. There was 6.7 billion in TARP loans which subjected GM to government oversight. That amount has been paid back with interest.

* Oh yeah...then the government decided to reduce the loan to $6.7 billion in the bankruptcy hearings of 2009. The would just take the remainder in the form of stock in the new GM. Good idea huh? Investing in stock, right? Too bad they sold the stock for a LOSS of $25.1 billion. NBC News

That is how much would be lost if the Treasury cashed in its GM stocks right now. The Treasury bought stocks in GM at a high of however many billion. Then the share price fell. However much they sell it for will constitute how much of a loss it will be. If they hold onto them long enough and GM stocks go higher than what the Treasury paid for them, then there will have been money gained. It's a fundamental misunderstanding of how the bailout went down. This wasn't money given away, this was a purchase, and the discussion of "loss" is a hypothetical based on if we sold right now. You may want to mention that because everyone on Wall Street knows that the Treasury is sitting on several billion dollars of stocks in GM that the country wants back, no one is buying GM. Why buy GM now, when the government is expected to unload their stocks in GM any day now, at a huge loss? This effect has actually artificially depressed GM's stock value over the last few years, as everyone's waiting for that jackpot to hit.

And all for what? GM still lost 22,500 jobs, closed 13 plants and 900 dealerships. Wiki So we saved a company that employed thousands of Union workers (ie: Democratic votes) that went on to produce such game changing cars like the Chevy Volt. (Please detect the sarcasm.)

GM would have lost every worker, ever. Every job. Every plant. Every dealership. Nice to see that you see this as a political issue (oh no! democratic union workers!) instead of an economic one. It's also nice to see that you let your car tribalism get in the way of rational thinking.

Meanwhile companies like Ford were able to weather the storm w/o government assistance

They got a low interest loan for R&D from the government, FYI.

Now I know the argument goes that so many ppl would be left without genuine Chevy parts. So? Do you really think that with all the Chevy and GM vehicles on the road...that no one would step in and fill the void? I'm pretty sure Ford would at least consider it, as well as other manufactures looking to make something to sell. That Obama and his administration is so out of touch with how business operates is just stupifying.

Considering the entire US auto industry would have collapsed, yeah, it's pretty safe to say the void would be a gaping maw for a pretty long time. I'm sure Ford would have employed those tens of thousands of workers, though.

At 9/18/12 01:02 PM, TheMason wrote:
I think you are seeing things that are not there.

Okay but the point is that 47% figure includes the unemployed, disabled, elderly, and anyone else who doesn't pay income taxes because they don't have income, or not enough income. Which constitutes a massive chunk of that 47% figure. So it's pretty misleading when the candidate for President of the United States says "47% of Americans don't pay income tax" without any sort of clarification or breakdown of the statistic, which allows people to misconstrue that as proof that half the country are lazy poors who contribute nothing to society.

* 80% of the Army
* The Joint Strike Fighter
* Repealing ACA
* Cutting back on the Navy's sub fleet
* The Dept of Education

At 9/18/12 01:05 PM, Feoric wrote:
How is this in tune with "robbing"? There were both loans and a flat-out purchase of shares. The loans have been paid back,...There was 6.7 billion in TARP loans which subjected GM to government oversight. That amount has been paid back with interest.

Dude! Read the story! The loan that was paid back with interest was paid NOT from GM profits or revenue but rather a DIFFERENT TARP fund that Treasury has been holding in escrow in case GM needed additional or emergency operating funds! Treasury (ie: the Govt) approved GM tapping into this TARP account...to pay back the loans since GM cannot operate on its own!

So yeah GM is robbing Paul (ie: TARP) to repay Paul (ie: TARP). GM paid the government back the loan...with interest...with government money. Sorry...but while you are right that the loan is paid off...it's not because GM stabilizied itself to the point of being able to pay back the money itself.

That is how much would be lost if the Treasury cashed in its GM stocks right now. The Treasury bought stocks in GM at a high of however many billion. Then the share price fell. ... This wasn't money given away, this was a purchase, and the discussion of "loss" is a hypothetical based on if we sold right now.

First of all, this was NOT a purchase. Instead the government converted their loan into shares of GM stock based upon the value of the loan...not the fair market value of GM. Therefore the US government not only bought high...they artifically inflated the price so when the IPO hit the price tanked to adjust to GM's real value on the open market.

So yeah...in a very real sense this was money given away. Stupidly by people who don't know what they are doing in Washington.

...Treasury is sitting on several billion dollars of stocks in GM that the country wants back, no one is buying GM. Why buy GM now, when the government is expected to unload their stocks in GM any day now, at a huge loss? This effect has actually artificially depressed GM's stock value over the last few years, as everyone's waiting for that jackpot to hit.

1) That ppl are waiting to buy GM stock because a govt sell-off will cause GM shares to plummet is true. Which is why we should've never done the stock for loan forgiveness scheme in the first place. The govt never has any incentive to sell of the stock because A) prices will take forever to reach $53/share since ppl are waiting for government action before they take action themselves. B) Even after share prices reach $53/share...they can't sell because someone selling that much stock usually triggers a panic and could destabilize the stock. C) The government can get stock prices to $53/share through inflation so on paper the taxpayer makes the money back...but with grossly devalued dollars so they take a loss in terms of purchasing power. D) We've already sold off some stock...for a loss. Everytime we do this means the next benchmark we have to clear creeps up. Today $53/share...what's next after the Obama brain trust makes another stellar decision...$67/share?

2) GM's stock is underperforming because GM makes a crappy product and poor business decisions such as the Chevy Volt.

GM would have lost every worker, ever. Every job. Every plant. Every dealership. Nice to see that you see this as a political issue (oh no! democratic union workers!) instead of an economic one. It's also nice to see that you let your car tribalism get in the way of rational thinking.

Any you're naive to think electoral calculus is ever far from Obama's (or an president's) decision making process.

Furthermore, I am the one being rational and not emotional. Those jobs would be transferred to other segments of the economy. Time and time again, whenever the government gets involved with saving jobs...they just transfer the misery to some other segment of the economy. For example Bush intervened in the steel market when we were loosing market share to foreign steel. The problem is we lost more jobs than we saved in other sectors of the economy.

Also, there is a substantial difference between loans made to a healthy company...and money foolishly thrown at people who do not build a good product.

Now I know the argument goes that so many ppl would be left without genuine Chevy parts. So? Do you really think that with all the Chevy and GM vehicles on the road...that no one would step in and fill the void? I'm pretty sure Ford would at least consider it, as well as other manufactures looking to make something to sell. That Obama and his administration is so out of touch with how business operates is just stupifying.

Considering the entire US auto industry would have collapsed, yeah, it's pretty safe to say the void would be a gaping maw for a pretty long time. I'm sure Ford would have employed those tens of thousands of workers, though.

It wouldn't have just been Ford. Kia, Toyota, Honda, BMW...all of whom are free from the constraints of a major auto manufacturer failing. All of whom are coming over here with better business practices (one of which being modern labor-management relationships) and opening plants.

Oh...and I noticed that you opted for attacking me for my 'Tribalism' (I also own a GM product, 2005 Jeep, and in the past have owned several KIAs)...instead of mentioning the reference to Aptera. I'd rather see the government, if they are hellbent on giving money away in the form of 'loans' to shitty companies, just give grants to up and coming start-ups like Aptera.

Debunking conspiracy theories for the New World Order since 1995..." I hereby accuse you attempting to silence me..." --PurePress

At 9/18/12 01:02 PM, TheMason wrote:
I think you are seeing things that are not there.

Okay but the point is that 47% figure includes the unemployed, disabled, elderly, and anyone else who doesn't pay income taxes because they don't have income, or not enough income. Which constitutes a massive chunk of that 47% figure. So it's pretty misleading when the candidate for President of the United States says "47% of Americans don't pay income tax" without any sort of clarification or breakdown of the statistic, which allows people to misconstrue that as proof that half the country are lazy poors who contribute nothing to society.

I think the misonstruing here is on your part and you're reading that into Romney's statement. He simply said that they don't have an incentive to vote for anyone but Obama. As for it constituting a massive chunk...it's not that much. Maybe 44% of the 47% (or about 20-22% of all Americans with some source of income).

* Repealing ACA

ACA isn't going to do what you hope it will. It just staves off the collapse of Medicare a little while longer while providing higher insurance costs to working families. (I'm experiencing this now with my daughter's insurance.) Furthermore, it will force ppl into government run programs that will be highly inefficent.

* The Dept of Education

All this agency does is take dollars out of the states to cycle them through Washington where money is lost to bureaucracy and wasteful spending so that a reduced amount may be returned to the states...with a hole host of silly strings attached. We see absolutely no value out of this agency and it has nothing but a track record of failure. It is the JSF of social spending.

In regards to Romney saying 47% of the people are willingly dependent on the government. <- how he likely should've phrased it). I really don't find it more damning than Obama saying in '08 that small town folks are bitter and cling to guns and religion. I don't think the media backlash for Obama was that great outside of Fox News, and i doubt the media backlash for Romney will be that great outside MSNBC. Hell this will blow over in a week seeing how the middle east is in a perpetual state of disarray and they'll shift attention to that again.

At 9/18/12 01:54 PM, TheMason wrote:
ACA isn't going to do what you hope it will. It just staves off the collapse of Medicare a little while longer while providing higher insurance costs to working families. (I'm experiencing this now with my daughter's insurance.) Furthermore, it will force ppl into government run programs that will be highly inefficent.

Which parts exactly are going to be the problem? The ACA is very big and does a mass of different things.

All this agency does is take dollars out of the states to cycle them through Washington where money is lost to bureaucracy and wasteful spending so that a reduced amount may be returned to the states...with a hole host of silly strings attached. We see absolutely no value out of this agency and it has nothing but a track record of failure. It is the JSF of social spending.

Takes money from the states? How so? As in the form of Fed taxes instead of state taxes? Well, if I trusted the states to actually use that money for education without the Federal government looking over their should, then you'd have a poin there. Thing is, the states wouldn't.

Jesus christ dude, how on earth do you say things like this with a straight face? The nationalization of the auto industry ended up working out extremely well and the UAW secured a very favorable contract with wage increases. They're basically some of the few workers in America doing well right now. Propping up the auto industry was an issue supported by both Republicans and Democrats alike. It was neither a conservative nor liberal issue, which may have forgotten, or you have a selective memory, or you have amnesia. Do you even comprehend the scale we're dealing with here? We're talking about the collapse of the entire fucking American auto industry, right down to the manufacturing plants to local dealerships. Do you know how many tens thousands of jobs that entails? And you're okay with that because "GM makes shitty cars!"? What the fuck is wrong with you? Do you like it when people suffer? And I guess it doesn't matter to you that the loan (yes, it wasn't a bailout, it was a loan from the government) that saved thousands of jobs, and thousands more from the nasty trickle-down unemployment that would have resulted from the U.S. auto industry going completely belly up, has been re-paid with interest and at zero cost to taxpayers? Just face it: it was a successful example of government stimulus.

Demonstrate to all of us how the implosion of the entire US auto industry really wouldn't have been all that bad with facts and numbers from reputable sources. I dare you.

You can't have numbers and soruces for things that never happened. Notice how Ford didn't need bailout money? Notice how Chrysler ended up selling to overseas marques? Clearly, the auto industry was nowhere near collapse. If that were the case, all US auto makers would've needed bailouts. Notice how most other auto makers didn't really need to lay off "tens of thousands of people"? Again, I fail to see how I need to take responsibility for GM fucking up? I don't like to be people suffer (they wouldn't have anyway), but I fail to see how it's my fault. Why should I pick up GM's slack?

Now, sure, things worked great for unions. But again, if the Unions were what mattered, why didn't GM make better cars and not run their business into the ground? Why didn't the Unions budge on their demands? Because they knew the federal. BTW GM stock is in the toilet, and the money is will never be repaid. We're getting down to the real root of the American economy. Special groups are being favored and propped up by the government, when other people are told to eat shit. My father has lost a business...where was his bailout? Why should the American taxpayer have to support a company who couldn't even support themselves?

Yes, you're all fucking nuts, if we're using your posts as any example.

At 9/18/12 01:47 PM, TheMason wrote:
Dude! Read the story! The loan that was paid back with interest was paid NOT from GM profits or revenue but rather a DIFFERENT TARP fund that Treasury has been holding in escrow in case GM needed additional or emergency operating funds! Treasury (ie: the Govt) approved GM tapping into this TARP account...to pay back the loans since GM cannot operate on its owns

So yeah GM is robbing Paul (ie: TARP) to repay Paul (ie: TARP). GM paid the government back the loan...with interest...with government money. Sorry...but while you are right that the loan is paid off...it's not because GM stabilizied itself to the point of being able to pay back the money itself.

You're misunderstanding the purpose of the escrow account. This wasn't some elaborate debt-for-equity swap. The escrow account was created as part of the restructuring plan. The funds in the escrow account came from a portion of the loan from the Treasury and the Canadian government, and while the Treasury retained approval rights over GM's usage of the funds, it was still property of GM. The escrowed funds were expected to be used for extraordinary purpose expenses, and as it turned out, GM didn't need it and repaid it to the Treasury. Of the $52.4 billion dollars of assistance from the Treasury, only $6.7 billion was in the form of loans. GM was already making several installments in paying back the $6.7 billion loan prior to then GM announced that it had paid back the entirety of the remaining $4.7 billion in loans from the U.S. government (and another $1.1 million to the Canadian government). GM had until 2015 to pay back those loans. The point is this: GM was doing well enough to not need the escrow funds and used it to repay the loans, which was actually the purpose of the escrow account to begin with. Under the loan agreement, GM was to pay back any remaining funds in the escrow account to the Tresury/Canadian government by June 30th 2010. So, yes, GM was stable enough to pay it back. If they weren't they would have held on to the escrow account. They had five years to pay it back, they payed it back in 9 months.

First of all, this was NOT a purchase. Instead the government converted their loan into shares of GM stock based upon the value of the loan...not the fair market value of GM. Therefore the US government not only bought high...they artifically inflated the price so when the IPO hit the price tanked to adjust to GM's real value on the open market.

Most of the government's GM investment was converted to an ownership stake in GM; $2.1 billion in preferred stock; and 60.8% of the company's common equity. You're right, we're probably going to lose some money on this, but not nearly as much as we originally thought. There was no profit motive for this deal: the loss we'd take for bailing out GM is going to be far far less than the loss of the American auto industry. Realistically, the IPO isn't going to bring in 52 billion dollars.

1) The govt never has any incentive to sell of the stock because A) prices will take forever to reach $53/share since ppl are waiting for government action before they take action themselves.

There will be a massive surge in stock price when there are rumors of the government starting to sell the stock as people are going to start buying dirt cheap stock in massive quantities before anyone else. People will short it and the price will normalize to actual market value despite the efforts of underwriters trying to keep the price as high as possible, as it is with any major IPO. It's doubtful if it will hit 53 dollars a share, my guess is no, not right away, but I think the loss will be minimized as times goes on if GM continues to be profitable.

B) Even after share prices reach $53/share...they can't sell because someone selling that much stock usually triggers a panic and could destabilize the stock.

Except the market will know the government is the one selling the shares? It wouldn't be a panic, it would be a feeding frenzy.

C) The government can get stock prices to $53/share through inflation so on paper the taxpayer makes the money back...but with grossly devalued dollars so they take a loss in terms of purchasing power.

This makes zero sense to me and I'll need you to clarify that. How do you adjust stock prices via inflation? Stocks are a reflection of the price of ownership in a company.

D) We've already sold off some stock...for a loss. Everytime we do this means the next benchmark we have to clear creeps up. Today $53/share...what's next after the Obama brain trust makes another stellar decision...$67/share?

Again, we never intended to make a profit. In fact the popular opinion at the time was that GM was never going to be able to repay the loans.

2) GM's stock is underperforming because GM makes a crappy product and poor business decisions such as the Chevy Volt.

At 9/18/12 12:36 PM, TheMason wrote:
Let's talk about GM and the auto-bailouts.

* GM paid back it's bail-out but did so with TAXPAYER money from another TARP account GM was given by the US and Canadian government to use for unexpected operating costs...and to pay back their loans to the US government if they could not. It wouldn't be quite so bad if this was a case of robbing Peter to pay Paul...instead it's robbing Paul to pay Paul. ABC News The New York Times

* Oh yeah...then the government decided to reduce the loan to $6.7 billion in the bankruptcy hearings of 2009. The would just take the remainder in the form of stock in the new GM. Good idea huh? Investing in stock, right? Too bad they sold the stock for a LOSS of $25.1 billion. NBC News

And all for what? GM still lost 22,500 jobs, closed 13 plants and 900 dealerships. Wiki So we saved a company that employed thousands of Union workers (ie: Democratic votes) that went on to produce such game changing cars like the Chevy Volt. (Please detect the sarcasm.) Meanwhile companies like Ford were able to weather the storm w/o government assistance and start producing the 2012 Focus which gets up to 40 MPG (if you get the manual) without the price tag of a hybrid (as well as not being a mobile HazMat incident waiting to damage people, property and the environment). And a truck that has great horsepower and torque...and gets 26-28 MPG.

Now I know the argument goes that so many ppl would be left without genuine Chevy parts. So? Do you really think that with all the Chevy and GM vehicles on the road...that no one would step in and fill the void? I'm pretty sure Ford would at least consider it, as well as other manufactures looking to make something to sell. That Obama and his administration is so out of touch with how business operates is just stupifying.

And not just the big boys...we let truly revolutionary cars that could've changed the game, like the Aptera whither and die on the vine all because of silly and nonsensical government red tape from the federal and California governments.

The main concern the government and U.S. citizens had about the auto industry crisis was the fear of a monopoly. With a potential collapse of Chrysler and Gm, Ford would be the only major domestic car company left in America. Personally, I prefer Ford out of the three brands for many reasons. To name a few more efficient engines, reliability, the types of cars it chooses to build (more emphasis on cars rather than suv's, of corse with the exception of the F-150 and even that is comparatively more more efficient than Dodge or GM trucks), and the fact that they didn't need a bailout. Economically, Ford deserves to be the thriving company, it out-competed the other two fair and square.

The decision was weighed upon the idea, "should the government spend tax-payer's dollars to bailout and possibly stabilize Chrysler and GM, or should the government let those companies fail and guarantee a monopoly?" Putting yourself back into that time period, yes, it was a controversial and difficult decision. Although the approaches to bailing out each company were different, we can see the results now.

Chrysler heavily refined its auto line-up, its v-6 and later on i-4 engines, and is posting awesome profits, having repaid its outstanding loans to our government.

GM has also posted immense profits and repaid the government's loans, however our government now has a huge holding in the company after the bailout. How GM has managed this increase in sales, I don't know. They have only refined a few v-6 engines, and introduced a few more small sedans with crappy i-4's. My guess would be advertising. I recall seeing far less Silverado adds compared to sedan adds of all kinds, from Buick, GM's hybrids, and small sedans after the bailout.

I personally would have had no problem with allowing GM to fail, if it didn't leave Americans with a monopoly within the American auto industry.

How this all relates to the topic, Obama, and the majority of congress, Democrats and Republicans alike were in favor of salvaging the industry and were responsible for the bailout. With us having once again given them a second chance, we can be thankful that the bailout was immensely successful, not only in restoring these companies to former grace, but by revitalizing our American spirit.

Well, apparently Romney likes to fire people...A lot. Remember KB Toys? They were shut down when Bain came in. Guess who's in charge of Bain? Romney.

And Obama likes to tax employers into firing people. And likes detaining (not arresting) people for making a movie. And likes funding revolutionaries who end up attacking US soil and killing one of our embassidors.

Guess why Bain fired people at KB Toys? Because the company was already going under when Bain came in the picture.

Not saying Romney is any better (he also believes in high taxation, the Patriot Act, and war), but to pretend that Obama is better in any aspect is a joke.

At 9/18/12 06:36 PM, TB1ZZL3 wrote:
Welp, I thought Obama would win, but I didn't think he'd win by Romney committing political suicide. Well done, Mitt.

This is what I've been saying for months. From the first page of this thread:

At 6/26/12 10:45 PM, BrianEtrius wrote:
Like I've said earlier: Obama doesn't win this election. Romney loses the election for the Republicans.

It's been almost 3 months from that post and Romney's still more or less in the in the same position. He really hasn't gotten any momentum in much of the polling so whatever he's doing is clearly not working, And here we are, what, 5 weeks to the election? Unless there's a major ace in the hole Romney's got going into the home stretch what he is going to do?

Oh yeah, when David Brooks has nothing nice to say about Romney, that's a bad sign generally. Again, unless the Romney campaign's following some better formula for a presidential election that we're not aware about, why are you pissing off David Brooks?

The reason why Romney is in the same position because Obama is running one of the best campaigns in recent history, imo. Obama has been leading the narrative in the news cycle since the convention because Romney is such an incompetent idiot when it comes to his campaign. Obama is leading in the polls without having to hammer his policy positions or anything. It's effortless for him. I'm starting to think Romney's campaign is run by Democrats.

At 9/18/12 01:47 PM, TheMason wrote:
Dude! Read the story! The loan that was paid back with interest was paid NOT from GM profits or revenue but rather a DIFFERENT TARP fund that Treasury has been holding in escrow in case GM needed additional or emergency operating funds! Treasury (ie: the Govt) approved GM tapping into this TARP account...to pay back the loans since GM cannot operate on its owns

So yeah GM is robbing Paul (ie: TARP) to repay Paul (ie: TARP). GM paid the government back the loan...with interest...with government money. Sorry...but while you are right that the loan is paid off...it's not because GM stabilizied itself to the point of being able to pay back the money itself.

You're misunderstanding the purpose of the escrow account. This wasn't some elaborate debt-for-equity swap.

Nope...not misunderstanding it at all. I never said the escrow account was part of the debt-for-equity swap. What I said was the escrow account was a second account funded in large part, if not wholly, by the US and Canadian governments. It was not the company was making enough profit to pay off the debt...in fact they struggled with the first payments. They just simply did not need this pool of government money. So they paid back the loan that got a lot of press.

Now where the debt-for-equity swap comes in on the original loan that was well over $50 billion that the government said they'd take stock for in exchange for lowering the loan to $6.7 billion. It was this $6.7 billion that GM paid off with the escrow account.

Most of the government's GM investment was converted to an ownership stake in GM; $2.1 billion in preferred stock; and 60.8% of the company's common equity. You're right, we're probably going to lose some money on this, but not nearly as much as we originally thought. There was no profit motive for this deal: the loss we'd take for bailing out GM is going to be far far less than the loss of the American auto industry. Realistically, the IPO isn't going to bring in 52 billion dollars.

The US taxpayer would've been better served making each auto worker who lost a job a millionare. Instead, we just transfered wealth to GM, Chrysler and the UAW.

There will be a massive surge in stock price when there are rumors of the government starting to sell the stock as people are going to start buying dirt cheap stock in massive quantities before anyone else. People will short it and the price will normalize to actual market value despite the efforts of underwriters trying to keep the price as high as possible, as it is with any major IPO. It's doubtful if it will hit 53 dollars a share, my guess is no, not right away, but I think the loss will be minimized as times goes on if GM continues to be profitable.

The IPO has already happened. My point is people are going to try and wait the government out to get a bargain. In the meantime, the taxpayer is stuck with stock they way over paid for.

B) Even after share prices reach $53/share...they can't sell because someone selling that much stock usually triggers a panic and could destabilize the stock.

Except the market will know the government is the one selling the shares? It wouldn't be a panic, it would be a feeding frenzy.

Not necessarily. They wouldn't be getting a deal anymore, just paying what the stock is worth. And while theoriticly the market would know...who's to say that they wouldn't panic anyway? Especially if people who bought at today's close at $24.43 decided to take a profit?

C) The government can get stock prices to $53/share through inflation so on paper the taxpayer makes the money back...but with grossly devalued dollars so they take a loss in terms of purchasing power.

This makes zero sense to me and I'll need you to clarify that. How do you adjust stock prices via inflation? Stocks are a reflection of the price of ownership in a company.

Okay in 1987 I bough Batman comics for $0.75. By 1990 I was paying $1.00. Now it's $3.99. Guess what changed; the value of the comic book or the value of the dollar? The value of the dollar changed and it is now worth less than it was in 1987.

So because of inflation, the stock price adjusts not only to the intrinsic value of a company...but the intrinsic value of the dollar as well. So if the fed starts pumping out greenbacks (like it announced this week)...the value of GM will hit $53 about the time DC starts selling Batman for $8.

Again, we never intended to make a profit. In fact the popular opinion at the time was that GM was never going to be able to repay the loans.

I don't care about making a profit...just don't take a loss. And using government money to pay off a government loan...is not paying off the loans. So popular opinion is right.

2) GM's stock is underperforming because GM makes a crappy product and poor business decisions such as the Chevy Volt.

Funny, last I heard they made a record profit last year.

And yet...they use government money to pay off government loans. Talk about corporate welfare. OWS should serious consider whether or not voting for Obama is the same as voting for Romney.

Any you're naive to think electoral calculus is ever far from Obama's (or an president's) decision making process.

Huh? What does that have to do with the effects of letting GM go bankrupt?

Dude...really? Pathetic attempt:

At 9/18/12 01:05 PM, Feoric wrote:

"GM would have lost every worker, ever. Every job. Every plant. Every dealership. .Nice to see that you see this as a political issue (oh no! democratic union workers!) instead of an economic one. It's also nice to see that you let your car tribalism get in the way of rational thinking."

It has nothing to do with GM going bankrupt. You attacked me for looking at the situation from a political/electoral vantage point. I'm pointing out that Obama, FDR, Hoover, Clinton, W...they all look at the political situation when making public policy.

Furthermore, I am the one being rational and not emotional. Those jobs would be transferred to other segments of the economy.

Yeah, shipped overseas.

*sigh* Too bad that's simply not true. Afterall, KIA, Toyota and BMW are all moving plants to the US because of the economic sense it makes having the means of production located in the market where you are trying to sell. That's why New Balance brought shoe manufacturing back to the US and Dell is shipping customer support back from India. Outsourcing just doesn't make all that much sense.

Debunking conspiracy theories for the New World Order since 1995..." I hereby accuse you attempting to silence me..." --PurePress

At 9/18/12 11:10 PM, Feoric wrote:
The reason why Romney is in the same position because Obama is running one of the best campaigns in recent history, imo. Obama has been leading the narrative in the news cycle since the convention because Romney is such an incompetent idiot when it comes to his campaign. Obama is leading in the polls without having to hammer his policy positions or anything. It's effortless for him. I'm starting to think Romney's campaign is run by Democrats.

The joke is that it's not really a strategy but rather common sense. SNL 's opening political skit this past weekend was spot on in this weird way: all Obama really has to do is to have Romney speak for 5 minutes before you realize how disconnected Romney is and how he can talk himself into a hole bigger than Texas. One thing's for sure, it's working.

Tax money from business entities is independent of payroll money. The only intermingling is done as an active move on the part of the employer, not because of taxes. So either, you have no idea what you're talking about, or you're blaming the government for the selfish and bad acts of the employers.

Guess why Bain fired people at KB Toys? Because the company was already going under when Bain came in the picture.

At 9/19/12 12:03 AM, TheMason wrote:
Nope...not misunderstanding it at all. I never said the escrow account was part of the debt-for-equity swap. What I said was the escrow account was a second account funded in large part, if not wholly, by the US and Canadian governments. It was not the company was making enough profit to pay off the debt...in fact they struggled with the first payments. They just simply did not need this pool of government money. So they paid back the loan that got a lot of press.

Yes, you in effect said that with the whole "robbing Paul to pay Paul" bit. The language is different, but they're both describing the same phenomenon. What does it matter that they struggled to pay the loans at first (which was more than what was expected in terms of GM's ability to pay back anything at the time) when they went to pay off the rest of the 4.7 billion in loans? Even you admitted just now that they didn't need it, so what exactly is the big deal here? They would have needed it if the company was struggling to make ends meet. The fact that they were able to pay back the loan in full means the company was turning around, which is reflected in their profits. I don't see why it's so difficult for you to get this. Do you have the Chevy Volt that much?

The US taxpayer would've been better served making each auto worker who lost a job a millionare. Instead, we just transfered wealth to GM, Chrysler and the UAW.

The taxpayer would have been completely fucked. What kind of effects of the collapse of GM do you think would have on the markets, retirement funds and invstments? What would unemployment be like today? You really think foreign car companies would swallow that many jobs and have them all domestic? Even so, only a limited portion of that total amount of unemployed would have been absorbed by other car companies, mainly assembly line workers. Service shop workers, auto dealers, manufacturing and technical jobs would be completely gone. You think Ford and BMW would cusion that blow? Yeah right.

Oh, and I have no problem with the UAW getting a nice deal, because the last time I checked, unions weren't responsible for white flight, they sure as hell weren't responsible for outsourcing and those are the two biggest reasons for Detroit's decline. Unions weren't responsible for the insipid design and engineering of 20+ years of domestic cars, they weren't responsible for asinine business decisions that ruined 70+ years of domestic loyalty to Detroit automakers, and they weren't responsible for putting all the automaker's eggs in the basket of cheap to make, high margin body on frame SUVs that got shit gas mileage. The unions weren't responsible for having redundant brands that lead to a hugely inefficient company. Most of their brands had models that directed competed with and cannibalized sales from other brands in GM. Compare that to a company like Toyota that has 3 brands with at least a nominally focused reason for existence. Detroit automakers basically had a 50 year head start on European and Japanese automakers due to World War II. They squandered it with lazy management and poor reactions to externalities like the Oil Crisis. These things together are the reason why higher labor costs from the unions exercising their leverage would not have saved Detroit from its current fate and would not have saved Detroit automakers from their woes either. I mean, there are plenty of reasons to throw shit at GM and I have no problem pointing them out here, but even I recognize letting them go bankrupt would have horrible repercussions for the entire country and would have decimated an already crumbling Detroit.

This figure varies wildly depending on where you're looking. Based on the CBO data, the projected total losses from the assistance to the auto industry (which includes both GM and Chrysler) is between $14 and $20 billion (the former being the CBO's number, the latter the OMB's.) It is not broken down any further in said report, so you'll need to show me your sources if you want to discuss this further (the 44/45 billion figure comes from the WSJ, which is over a span of 20 years, btw). Which is a drop in the bucket when compared to the rest of TARP.

The IPO has already happened. My point is people are going to try and wait the government out to get a bargain. In the meantime, the taxpayer is stuck with stock they way over paid for.

Right, yeah, I was making an analogy to Facbook but deleted it because it was stupid and I didn't modify the rest of my post. The IPO raised $18.1 billion, which is the second highest IPO ever.

Not necessarily. They wouldn't be getting a deal anymore, just paying what the stock is worth. And while theoriticly the market would know...who's to say that they wouldn't panic anyway? Especially if people who bought at today's close at $24.43 decided to take a profit?

The market is always looking to make a profit. GM's stock right now is in the shitter because there's really no incentive to buy right now. Opening the floodgates drives in more investors, bumping up the stock price.

Okay in 1987 I bough Batman comics for $0.75. By 1990 I was paying $1.00. Now it's $3.99. Guess what changed; the value of the comic book or the value of the dollar? The value of the dollar changed and it is now worth less than it was in 1987.

So because of inflation, the stock price adjusts not only to the intrinsic value of a company...but the intrinsic value of the dollar as well. So if the fed starts pumping out greenbacks (like it announced this week)...the value of GM will hit $53 about the time DC starts selling Batman for $8.

No, you're entirely wrong. Inflation does not effect stock prices the way it effects comic books, lol. Share prices do not rise in accordance to the rate of inflation. Stock prices actually go down due to inflation. Here's why: as inflation increases, central banks such as the Federal Reserve increase interest rates to reduce the money supply to slow down the rate of inflation. When interest rates are high, people tend to find it expensive to borrow, and therefore there is less money floating around. When interest rates are high, people require higher returns on stocks. You can't just increase the earnings for a stock, so its price has to adjust downward. Inflation compresses P/E values. So, no, what you're describing is not going to happen in this universe.

The rest of your post I don't really know how to respond to. We're through the looking glass.

What Bain specializes in is in buying a mature company, (sometimes/rarely) adding value to that company, and then selling it at a profit. Like every other firm that makes it's money on leveraged buyouts they're ruthless as shit about cutting costs and increasing profitability/productivity. Here's how private equity firms like Bain work:

1) PE Firm acquires Company ABC.

2) PE firm implements a business strategy for Company ABC that maximizes short-term profit while racking up huge long-term debt.

3) Company ABC does well for a couple of years, and the PE managers give themselves large bonuses.

Management Fees can be massive and another way of extracting profits directly back to the PE firm. Also Dividend Recapitalization, which is just the PE firm raiding the balance sheet of as much cash as they want before anyone else gets any profit or dividend. A lot of times this will happen at a portfolio company with huge debt and a weak balance sheet, but after all these fees are taken, the PE still makes a massive profit and pays back their loans but the company still ends up going bankrupt.

At 9/19/12 07:36 PM, Feoric wrote:
Also Dividend Recapitalization, which is just the PE firm raiding the balance sheet of as much cash as they want before anyone else gets any profit or dividend.

While this is often the case and it nothing other than a drain on the economy. Private equity can serve to help and completely reinvigorate companies, when done properly.

Venture capital is always good. Sure there exists the inevitable 'leeching' aspect of the equity firm off of the startup, where the equity firm gets money in the long run even though it has been a long time since that equity firm gave any value. What sets venture capital apart from large scale equity, is that the venture operation would likely not exist at all if it were not for the infusion of capital. Far too often in large scale equity capital the target entity is not only surviving prior to buyout, but thriving.

For large scale equity to actually work one thing is vital and one of two other things is needed. The thing vital for large scale equity to actually be an economic success is that the target be struggling. If the target is thriving the leeching is added to the target's burden without any benefit being provided. There are some exceptions, such as a target that is on the cusp of something and is unwilling or unable to cross without the help or expertise of the equity firm.

The other thing that is needed is either for the equity firm to have the needed consulting/business expertise needed to fix the struggling entity, or for the equity firm to be (or have in waiting) another player in the industry through which the resources and knowledge of the target can either be absorbed, or whose expertise can push the target forward. (see Renault's buyout of Nissan and Nissan's major resurgence.)

If what I've been reading in the papers lately is true, I think the best strategy for the Republicans at the moment is to seal Romney up in a barrel until after the election so he can stop ruining their campaign.